Business processes, such as the procurement and fulfillment processes consist of activities that occur in different, seemingly unrelated functions or departments.

In other words, these processes are cross-functional, meaning no single group or function is responsible for their execution. Rather, it is a shared responsibility among many functional areas.

Enterprise systems (ES):

Systems that support end-to-end processes and are essential to the efficient and effective execution and management of business process

Silo effect:

A tendency where workers complete their tasks in their functional “silos” without regard to the consequences for the other components in the process

The key driver for this productivity and efficiency is

the ability of modern enterprise systems to effectively manage a business process from beginning to end in an integrated, consistent, and highly efficient manner.

successful organizations and industries

processes and enterprise systems to complete the work needed to achieve their goals.

Business process:

A set of tasks or activities that produce desired outcomes

Three processes are directly related to creating and delivering products and services.

They are buy, make, and sell.

Closely related to buying, making, and selling are four processes

used to design, plan, store, and service products.

The procurement process (buy):

refers to all of the activities involved in buying or acquiring the materials used by the organization, such as raw materials needed to make products.

The production process (make):

involves the actual creation of the products within the organization. Whereas the production process is concerned with acquiring needed materials internally (by making them), the procurement process is concerned with obtaining needed materials externally (by buying them). Each is appropriate for different types of materials

The fulfillment process (sell):

consists of all the steps involved in selling and delivering the products to the organization’s customers.

The life cycle data management process (design):

supports the design and development of products from the initial product idea stage through the discontinuation of the product.

The material planning process (plan):

uses historical data and sales forecasts to plan which materials will be procured and produced when, and in what quantities.

The inventory and warehouse management (IWM):

process (store) is used to store and track the materials.

The asset management and customer service processes (service): are used to maintain internal assets such as machinery and to deliver after-sales customer service.

are used to maintain internal assets such as machinery and to deliver after-sales customer service such as repairs.

Human capital management (HCM) processes (people)

processes (people) focus on the people within the organization and include functions such as recruiting, hiring, training, and benefits management.

Going further, two support processes are related to people and projects

track the financial impacts of process steps with the goal of meeting legal reporting requirements— for example, the Internal Revenue Service (IRS) or the Securities and Exchange Commission (SEC).

Management accounting or controlling (CO) processes (track- internal)

focus on internal reporting to manage costs and revenues

A customer order (fulfillment process) could

trigger the need to buy something, such as raw materials or component parts needed to manufacture the product.

The material planning process

could indicate that the company needs to procure materials based on a forecasted demand for products or trigger in-house production.

The asset management or customer service process could

trigger the procurement of a part needed to repair a machine or a product previously purchased by a customer.

Fulfillment

is concerned with efficiently processing customer orders.

Material: A term that encompasses all the products, components, parts, and so on that an organization uses— makes, buys, stores, sells, etc.

A term that encompasses all the products, components, parts, and so on that an organization uses— makes, buys, stores, sells, etc.

The purpose of material planning

is to match the supply of materials with the demand.

lead time

is the time between placing the order and receiving the shipment.

Excess supply will result in

increased inventory costs, which are the expenses associated with storing materials.

Inventory and warehouse management (IWM):

is concerned with the storage and movement of materials.

Insufficient supply will result in

a situation called stock-out in which the company cannot meet its customers’ demand

corrective maintenance

is done as needed–for example, repairing a machine when it breaks down.

Lifecycle data management provides

a set of tools to manage product design and improvement throughout the lifecycle of a product. It enables an organization to optimize its product development process, from design to market, while ensuring that it complies with industry, quality, and regulatory standards. At the same time, it provides users— that is, the organization’s employees— with access to product data at any point in the product’s lifecycle.

Asset management is concerned with

both the preventive and corrective maintenance of an organization’s equipment

Preventive maintenance is performed

periodically–for example, the routine maintenance of a machine in a factory.

Human capital management (HCM):

consists of numerous processes related to all aspects of managing people in an organization. Examples of HCM processes are recruitment, hiring, training, compensation and benefits management, and payroll administration.

project management refers to the processes a company uses to plan and execute large-scale projects.

the processes a company uses to plan and execute large-scale projects.

Financial accounting is concerned with

tracking the financial impacts of processes with the primary goal of meeting legal and regulatory reporting requirements. Thus, it is externally focused.

GAAP means

generally accepted accounting principles

Accounts payable is

associated with the procurement process and is used to track money that is owed to vendors. Similarly, accounts receivable is used to track money owed by customers.

general ledger process records

the impacts of various process steps on a company’s financial position. The impacts are recorded in a number of accounts in the general ledger that represent an organization’s income, expenses, assets, and liabilities.

asset accounting is concerned with

tracking financial data related to assets such as machinery and cars.

Management Accounting or Controlling:

The tracking of costs and revenues for internal reporting that is intended to help management control costs and revenues and assess the profitability of various products and market segments

Which term refers to business processes that are not executed by a single group or function?

Cross-Functional

An enterprise system is a set of tasks or activities that produce desired outcomes.

False

Lead time is the time between placing the order and receiving confirmation that the item has been shipped.

False

Which of the following departments or functions are involved in the basic procurement process using a procure to stock strategy?

Warehouse, Purchasing, Accounting

The term materials encompasses which of the following?

Products, Components, Parts

Which of the following products fall(s) within GBI’s line of business?

Deluxe and professional touring bikes, Men and Women’s off-road bikes, and Bike Accessories

Information systems that support end-to-end processes are called business processes.

False

Projects rely on resources located in and work performed in other processes.

True

Which term represents a set of tasks or activities that produce desired outcomes?

Business Process

1) Which term refers to business processes that are not executed by a single group or function?

Cross-Functional

2) An enterprise system is a set of tasks or activities that produce desired outcomes.

False

3) Lead time is the time between placing the order and receiving confirmation that the item has been shipped.

Fasle

4) Which of the following departments or functions are involved in the basic procurement process using a procure to stock strategy?

a) Warehouse
b) Purchasing
c) Accounting

5) The term materials encompasses which of the following?

a) Products
b) Components
c) Parts

6) Which of the following products fall(s) within GBI’s line of business?